We will let you fail next time like we wanted the first time, f***er.
"AIG 2008 bailout called ‘extortion’; Greenberg’s lawsuit against US detailed in court hearing" by Andrew Zajac and David Voreacos | Bloomberg News September 30, 2014
WASHINGTON — The United States extorted American International Group shareholders when it extended a $182 billion taxpayer bailout at the height of the 2008 financial crisis, a lawyer told a federal court Monday in the opening of a case involving a lawsuit against the US government.
The suit, filed by Maurice ‘‘Hank’’ Greenberg’s Starr International, AIG’s largest shareholder when the financial crisis struck, contends the government’s assumption of 80 percent of the insurer’s stock was an unconstitutional ‘‘taking’’ of property that requires at least $25 billion in compensation.
David Boies, Greenberg’s famed litigator, is expected to question the architects of the bailout, including Ben Bernanke, Henry Paulson, and Timothy Geithner, during the trial in Washington. Boies said the Federal Reserve Bank of New York punished AIG by demanding equity and charging 14 percent interest to borrow — far more than major banks paid.
‘‘They charged an extortion rate,’’ Boies said in his opening statement in the US Court of Federal Claims. ‘‘They tried to demonize AIG and suggest somehow that AIG was a poster child for problems during the financial crisis.’’
Maybe you shouldn't have sold all those credit default swaps on sour mortgages.
Greenberg, who built AIG into the world’s biggest insurer before leaving in 2005, contends the government trampled the rights of shareholders. Boies said banks, including Morgan Stanley and Citigroup, got bailout loans at rates of less than 4 percent without surrendering equity.
I'm tired of bank bitching, I real am.
Some, including Citigroup, later settled civil claims that they fraudulently marketed mortgage-backed securities. ‘‘They didn’t take Citibank’s equity’’ as a condition of getting a loan, Boies told Judge Thomas Wheeler.
Speaking of Citi....
In outlining the government’s defense, Justice Department attorney Kenneth Dintzer said the United States acted lawfully through the bailout of AIG to avert a world economic collapse. Without the deal, AIG would have faced bankruptcy.
‘‘It was so big and so entrenched in the world’s economic system that its failure threatened the world’s economy,’’ Dintzer said in his opening statement. ‘‘The goal was to save the world from AIG.’’
AIG and the banking system threaten the world, and yet I'm fed Ebola and ISIS day after day after day.
Starr is improperly seeking ‘‘a $40 billion windfall,’’ Dintzer said. The bailout was ‘‘the largest package of assistance in human history,’’ he said. Even though AIG shareholders owned less of the company for a period, they still received a benefit, Dintzer said.
The 80 percent equity stake the New York Fed took mirrored an effort by private investors to save the company before the government stepped in, Dintzer said. He cited an AIG board adviser who said: ‘‘Twenty percent of something is worth more than 100 percent of nothing.’’
The loan was legal and voluntarily accepted by AIG’s board, Dintzer said.
Looks to me like this case needs to get thrown out.
The 85 names on Starr’s witness list include Bernanke, the former Fed chairman; Paulson, the Treasury secretary under President George W. Bush during the crisis; and Geithner, the head of the Federal Reserve Bank of New York in 2008 and President Obama’s first Treasury secretary.
The first witness called by Boies, Scott Alvarez, the general counsel of the Federal Reserve Board of Governors, testified about the credit terms extended by the government to financial institutions earlier in 2008. He repeatedly sparred with Boies over the Fed’s views of the financial health of AIG and banks at the time.
The complaint by Starr International, Greenberg’s Swiss-based investment firm, does not question the necessity of a rescue that began under Bush and continued under Obama. Rather, Starr claims AIG was singled out for punitive treatment that violated shareholders’ constitutional rights to due process and just compensation for their property.
I think the takeovers were unconstitutional, and they should have been left to die.
The trial will shed light on closed-door decision-making that led the New York Fed to take an 80 percent stake in AIG, beginning on Sept. 16, 2008, a day after the bankruptcy of Lehman Brothers Holdings.
Must be why it took the Globe another week to get back to it.
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"Timothy Geithner calls ’08 AIG bailout crucial" by Marcy Gordon | Associated Press October 08, 2014
WASHINGTON — Timothy Geithner, a key player in the government’s 2008 bailout of American International Group, on Tuesday affirmed in court his belief that the insurer’s rescue was needed to avert disaster for the financial system.
A lawyer grilled Geithner at the trial of a lawsuit brought by former AIG chairman and chief executive Maurice Greenberg. He is suing the federal government for about $40 billion over its handling of the bailout, claiming it violated the Constitution’s Fifth Amendment by taking control of the insurance giant without ‘‘just compensation’’ for the shares it received.
That is normally an argument to which I would be receptive. Not here.
The $85 billion loan package for AIG, which was teetering toward bankruptcy in September 2008, gave the government control of 80 percent of the New York company’s stock. Geithner was president of the New York Federal Reserve at the time and later Treasury secretary.
Geithner in his testimony Tuesday acknowledged he had said the bailout ‘‘wiped out’’ AIG shareholders.
That statement was in line with testimony on Monday by former Treasury secretary Henry Paulson, who said the AIG bailout was designed to punish the company. Paulson, who headed the Treasury Department at the time of the rescue, said shareholders should have faced punishment for the company’s troubled balance sheet.
Geithner is expected to return Wednesday for more testimony. Former Federal Reserve chairman Ben Bernanke testifies later in the week.
Geithner was questioned for a full day by Greenberg’s attorney, David Boies. He reconstructed the New York Fed’s deliberations over AIG and its discussions with AIG executives on terms for the loan. He frequently said he couldn’t recall specific facts or details.
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AIG nearly collapsed after making huge bets on mortgage investments that soured. Regulators worried that if AIG failed it would send shock waves through the financial system.
Then we need a new $y$tem.
The $85 billion in aid eventually grew to $182 billion, which AIG has repaid. It has returned to profitability.
Yeah, right, the taxpayer got paid back. Whatever you say.
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"Geithner defends terms of AIG bailout" by Marcy Gordon | Associated Press October 09, 2014
WASHINGTON — Former top regulator Timothy Geithner defended terms of the US government’s bailout of American International Group Inc., saying Wednesday that the insurance giant’s exceptionally risky behavior had caused losses that called for strict treatment.
The terms included a huge government stake in the company and an interest rate called ‘‘crazily high’’ by a government official. Geithner headed the New York Federal Reserve when it extended an $85 billion rescue loan to AIG in September 2008 as the company veered toward collapse.
In trial testimony, Geithner said he and his colleagues at the Fed and the Treasury Department believed that AIG’s dire financial condition was substantially the result of its management taking on excessive risk.
AIG, which had operations around the globe, buckled after making huge bets on mortgage securities that soured.
The government stepped in with nearly $185 billion in aid, which New York-based AIG has since repaid.
It was the second day of questioning for Geithner in the trial of a lawsuit brought by former AIG chairman and chief executive Maurice Greenberg. The suit, which seeks about $40 billion in damages, asserts that the US government violated the Constitution’s Fifth Amendment by taking control of AIG without just compensation for the shares it received. The government took control of 80 percent of AIG’s stock in exchange for the bailout aid.
David Boies, the attorney representing Greenberg, tried to point out contradictions in Geithner’s statements about AIG’s risk-taking and build the case that AIG was unfairly punished compared with other big financial companies receiving aid.
As a general policy, Geithner testified, the government imposed losses on shareholders of bailed-out companies that were in proportion to the bad decisions made by their managers.
That would appear to explain the big equity stake the government took in AIG and the interest rate on the loan, which was about 12 percent annually. In testimony Tuesday, Geithner had noted the 3.5 percent rate on the government’s loan to Citigroup Inc., which received a $45 billion bailout.
Based upon that the taxpayers will be forking over another $40 f***ing BILLION!
While affirming the necessity of the AIG bailout to avert catastrophe for the financial system, Geithner acknowledged having said the bailout wiped out AIG shareholders.
In an Oct. 22, 2008 e-mail cited by Boies, a New York Fed official said AIG’s interest rate was forced on the New York Fed ‘‘by people who have since punted on all the hard things that came about as a result of the decision to lend’’ to AIG.
Geithner said the e-mail probably referred to officials at the Federal Reserve Board or the Treasury Department.
Under later questioning, Geithner rebutted the idea that he was forced to set the interest rate and said he settled on it in consultation with the Federal Reserve Board and Treasury.
Geithner lied on the stand, huh?
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Also see: Bernanke defends AIG bailout in court
No defending him or them. Scum.
